The next iPhone may launch in the fall.

Apple’s next-generation iPhone processor has entered production, according to a Wednesday report. The chip, expected to ship with the name “A12,” will use a new 7-nanometer design that beats the existing 10-nanometer chips found in the iPhone 8, 8 Plus, and X. It could place the company’s next iPhones, set to launch in the fall, well ahead of Apple’s Android competitors.

The Bloomberg report claims that the Taiwan Semiconductor Manufacturing Company, a partner of Apple, has already started production of the new chips. This would confirm previous reports from July 2017 that Apple would use the company for its next generation of chips and switch to a seven-nanometer process. The figure refers to the half-measurement of nodes in a chip, so a smaller number means a denser processor. This could mean more computing power and reduced energy demands, crucial for a mobile device.

The race is now on to ship the first commercially available phone powered by a 7-nanometer processor. Samsung is the main competitor in this race, after it emerged in April that the company is preparing to start manufacturing the seven-nanometer Snapdragon 855. This chip is expected to use 35 percent less battery power than current chips, while offering speed boosts of 40 percent and support for 5G mobile connectivity. The upcoming Galaxy S10, expected to launch in the first quarter of 2019, may be the first device to use the chip. Samsung confirmed on Tuesday that it expects to start 7-nanometer production this year.

The internal components of an iPhone.

How Apple and other smartphone makers will use a more powerful processor is the big question. Augmented and virtual reality apps have seen growing support on mobile platforms, after Apple released its “ARKit” developer tools for iPhone last fall and Samsung partner Oculus released the standalone Go headset earlier this month. Offline artificial intelligence is another area of growth, one that developer Borui Wang has described as “the new buzzword for the next decade.”

Apple is set to take the stage at the Worldwide Developers Conference on June 4, where it is expected to provide more details about its next software updates for iPhone, iPad, Mac, and other devices.

It could chart the course for how a smartphone in 2019 will use all this extra computing power.